Tragedy of the commons in water

Friday, July 27, 2007

BBC had an interesting article on the debate as to whether market forces would be able to manage water:
The editor of the book, Kendra Okonski, a director of the UK-based International Policy Network, says the solution is to give water a market value.
"If we view water as a global common good, it means that we collectively own it and no one has the responsibility to look after it. "But if we manage it with markets and underlying institutions - such as property rights and the rule of law - then people are much more likely to look after the water and use it more effectively," she told the BBC News website.

Not looking after (and eventually) destroying resources is something that Garret Hardin termed as "Tragedy of the commons".

While bringing value to water (through cost recovery) is important -- as it encourages people to conserve, denying access to water because a person is unable to pay is bad. Thus, a subsidy or other mechanisms must be created, and that is the role of the state.